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ITAT upheld revision under s.263 finding assessment order erroneous and prejudicial to revenue interests. Assessee failed to establish loan genuineness and lenders' creditworthiness during initial assessment. Key factors: lenders lacked financial capacity for large interest-free loans, absence of loan confirmations, non-filing/minimal income shown in tax returns by lenders, and loans remaining unpaid without interest for extended period. Tribunal determined transactions fell outside reasonable probability, confirming their non-genuine nature. CIT's intervention justified as AO failed to conduct proper inquiry during assessment regarding loan authenticity and lenders' creditworthiness. Additional documentation provided during s.263 proceedings also failed to establish transaction legitimacy.
ITAT upheld revision under s.263 finding assessment order erroneous and prejudicial to revenue interests. Assessee failed to establish loan genuineness and lenders' creditworthiness during initial assessment. Key factors: lenders lacked financial capacity for large interest-free loans, absence of loan confirmations, non-filing/minimal income shown in tax returns by lenders, and loans remaining unpaid without interest for extended period. Tribunal determined transactions fell outside reasonable probability, confirming their non-genuine nature. CIT's intervention justified as AO failed to conduct proper inquiry during assessment regarding loan authenticity and lenders' creditworthiness. Additional documentation provided during s.263 proceedings also failed to establish transaction legitimacy.
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